We are in a Work From Home World, and Wall Street knows it.
Just check out some of the top performers among the largest Massachusetts stocks through the first half of 2020.
Sure, No. 1 is obvious: Moderna, the superhero of the moment. Investors, along with most of us, are rooting for the Cambridge biotech to quickly come up with a viable COVID-19 vaccine. Shares in Moderna have more than tripled in value, rising 228 percent during the first six months of 2020, based on these hopes, even as the Standard & Poor’s 500 index fell 4 percent over the same time.
Many other life science companies seem somewhat inoculated against the market’s volatility these days as investors take the long view that the demand for life-saving medical treatments will remain strong, virus or no virus.
The second-best performer out of the state’s 25 biggest companies might come as a bit of a surprise, though. It’s home furnishings retailer Wayfair, which prior to the pandemic had been in retrenchment mode, by cutting hundreds of positions in February. And when the pandemic hit, Wayfair shares initially tumbled along with almost everyone else’s.
But then, the Boston-based company started seeing better-than-expected sales as people stuck at home loaded up on furnishings and other supplies via its websites. Wayfair’s sales in April rose 90 percent compared to the same month last year, and the money-losing company even projected it would turn positive by at least one measure of profits this spring.
Wayfair’s stock reversed course, and it ended up more than doubling in price (up 119 percent) between the start of the year and the close of the second quarter on Tuesday. The fun didn’t end there: The stock rose another 11 percent on Wednesday to a new record closing price before losing a little ground on Thursday to settle at $214 a share, presumably as investors digested the headlines in the past week and realized the COVID-19 pandemic isn’t ending anytime soon.
There’s some question how long the shelter-in-place boost will last. Morningstar analyst Jaime Katz wrote in May that she expected the surge in sales to moderate during the coming months, as working from home becomes the norm. Sucharita Kodali, an analyst at Forrester Research, echoed those thoughts, saying she considered the unexpected revenue growth to be a short-term bump because most home-office items are typically a one-time purchase.
A trio of life science companies followed Wayfair as the next strongest large-cap stocks for the first half of 2020: Abiomed (up 41.6 percent), Vertex (up 32.6 percent), and Alnylam (up 28.6 percent).
And after those comes Akamai Technologies (up 24 percent), another “Shelter-in-Place” stock benefiting from the WFH trend. Revenue at the Cambridge-based company grew 9 percent in the first quarter (adjusting for currency exchange rates), beating expectations. Analysts at William Blair & Co. cited a surge in the online traffic handled by the company’s media delivery business — streaming video, games, and news — even with most major live sporting events put on hold.
Ben Rose, president of Battle Road Research, pointed to another factor: Akamai’s fast-growing cloud-security business, now making up roughly one-third of its revenue. Rose said Akamai offers products that can help protect corporate networks at a time of additional exposure when so many employees are logging in remotely.
Massachusetts has a number of other Shelter-in-Place stocks, companies that enjoyed a surge in market value during the past six months as customers hunkered down at home. They include cell phone antenna host American Tower (up 12.5 percent), as well as mid-sized companies such as Samuel Adams brewer Boston Beer (up 42 percent). BJ’s Wholesale Club (up 64 percent) is still going strong, as most consumers choose grocery shopping over dining out.
And iRobot (up 65.7 percent) said it’s cleaning up as consumers pay more attention to tidying their homes. Rose noted that a favorable government decision in April that removed an onerous tariff on iRobot’s China-made products probably helped lift the stock as well.
The hanging-out-at-home thing has its losers, too. Two local companies linked to the travel industry, General Electric (down 38.8 percent) and Tripadvisor (down 37.4 percent), have suffered as considerably fewer people travel by plane or stay in hotels. And shares in office-tower owner Boston Properties plunged 34 percent, despite the company’s insistence that nearly all of its office tenants are keeping up with the rent even as most workers stay at home.
Executives at those companies must be eager for things to return to normal. Aren’t we all? Everyone wants to emerge from this pandemic sooner rather than later. But being stuck at home has its advantages for some Massachusetts companies — and their investors.
Larry Edelman of the Globe staff contributed to this report.